Forrester v. Harleysville Lake State Ins. Co.

• Decision Date: 30 July 2012
• Docket Number: Case No. 11-15640
• Parties: DIANE FORRESTER, Plaintiff, v. HARLEYSVILLE LAKE STATE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

DIANE FORRESTER, Plaintiff,

v.HARLEYSVILLE LAKE STATE INSURANCE COMPANY, Defendant.

Case No. 11-15640

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN NORTHERN DIVISION

Dated: July 30, 2012

Honorable Thomas L. Ludington

OPINION AND ORDER DENYING PLAINTIFF'S MOTION

FOR PARTIAL SUMMARY JUDGMENT AND SANCTIONS

In 2011, Plaintiff Diane Forrester was injured in an automobile accident. At the time of the accident, she had a no-fault insurance policy issued by Defendant Harleysville Lake State Insurance Company. Following the accident, Plaintiff submitted claims to Defendant for medical expenses, lost income, attendant care, and replacement services. Defendant paid the medical expenses but not the rest of the claims, Plaintiff alleges. So Plaintiff brought suit.

Plaintiff now moves for partial summary judgment and Rule 11 sanctions. ECF No. 11. Specifically, Plaintiff seeks partial summary judgment on her entitlement to three unpaid categories of benefits: lost income, attendant care, and replacement services. She offers no evidence, however, regarding the amount claimed for the first category of benefits. She offers no admissible evidence regarding the amount claimed for the second category. And she offers only incomplete, contested evidence regarding the amount claimed for the final category. Because Plaintiff has not demonstrated that there are no genuine issues of material fact and that she is entitled to judgment as a matter of law, her motion for partial summary judgment will be denied.

Additionally, Plaintiff moves for Rule 11 sanctions against Defendant, asserting that it has no legitimate basis for opposing Plaintiff's claimed benefits. In filing her motion, however, Plaintiff did not comply with the requirement that Rule 11 sanctions pleading be filed as a separate motion. And she did not comply with the rule's twenty-one day safe harbor requirement. Accordingly, Plaintiff is not entitled to sanctions.

I

Plaintiff is a fifty-one year old woman. Single, she lives alone in a three-bedroom duplex. A small-business owner, Plaintiff owns and operates three laundry mats: Warwick Cleaners, Saginaw Wheeler Street Laundry, and Center Road Laundry.

On June 19, 2011, Plaintiff was injured in an automobile accident in Saginaw, Michigan. At the time, Plaintiff was insured by Defendant. The accident tore Plaintiff's right rotator cuff, damaged her shoulder joint (specifically, her acromioclavicular joint), and ruptured two disks in her neck (at C5-C6 and C6-C7).

As a result, Plaintiff reports, "she has been required to not only downscale her business but to hire employee to perform the work which she was fully capable of performing prior to June 19, 2011." Pl.'s Br. Supp. Mot. Summ. J. 1-2 ("Pl.'s Br."), ECF No. 11. At present, Plaintiff further reports, she "continues to be disabled from her employment and is wearing a neck brace (soft collar) and continues to take pain medications." Id. at 2.

Since the accident, Plaintiff acknowledges, "[t]he majority of the medical bills have been paid by Defendant." Id. But, Plaintiff asserts, "Defendant has refused to reimburse Plaintiff for her loss of income, expenses for attendant care and replacement services." Id.

Accordingly, in November 2011 Plaintiff brought suit for the unpaid benefits pursuant to the Michigan No-Fault Act in the Saginaw Circuit Court. In December 2011, Defendantremoved the case to this Court. ECF No. 1. Plaintiff now moves for partial summary judgment pursuant to Federal Rule of Civil Procedure 56 and for sanctions pursuant to Rule 11. ECF No. 11.

II

A

A motion for summary judgment should be granted if the "movant shows that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A party asserting that a fact cannot be or is genuinely disputed," Rule 56 provides, "must support the assertion by: (A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or (B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed. R. Civ. P. 56(c)(1) (formatting omitted).

The moving party has the initial burden of identifying where to look in the record for evidence "which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The burden then shifts to the opposing party who must "set out specific facts showing a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (citation omitted).

The Court must view the evidence and draw all reasonable inferences in favor of the non-movant and determine "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52.

B

"The primary goal of the [Michigan] no-fault act is 'to provide victims of motor vehicle accidents assured, adequate, and prompt reparation for certain economic losses.'" McCormick v. Carrier, 795 N.W.2d 517, 547 (Mich. 2010) (quoting Shavers v. Attorney Gen., 267 N.W.2d 72, 77 (Mich. 1978). To achieve this goal, the act enumerates a number of categories of "personal protection insurance benefits." Mich. Comp. Laws § 500.3107(1). Here, as noted, Plaintiff asserts that she is entitled to judgment as a matter of law on three categories of unpaid benefits: lost income, attendant care, and replacement services. Pl.'s Br. 2.

The act provides that these benefits "are overdue if not paid within 30 days after an insurer receives reasonable proof of the fact and of the amount of loss sustained." § 500.3142(2). Two requirements are thus imposed on a person seeking to collect — "in addition to the fact of the loss, the claimant must submit reasonable proof of the amount as well." Bajraszewski v. Allstate Ins. Co., 825 F.Supp.2d 873, 880 (E.D. Mich. 2011) (Lawson, J.) (citing Regents of Univ. of Mich. v. State Farm Mut. Ins. Co., 650 N.W.2d 129, 138 (Mich. Ct. App. 2002). "The statute requires only reasonable proof of the amount of loss," the Michigan Court of Appeals cautions, "not exact proof." Williams v. AAA Mich., 646 N.W.2d 476, 485 (Mich. Ct. App. 2002) (emphasis omitted).

The act also establishes a burden-shifting regime. "Once a claimant provides reasonable proof of the fact and amount of the loss, the insurer has a duty to conduct its own investigation into the reasonableness and necessity of the charges and ask for what it deems lacking." Detroit Med. Ctr. V. Encompass Ins. Co., No. 09-14821, 2011 WL 3111970, at *7 (E.D. Mich. July 26, 2011) (Lawson, J.) (quoting Borgess Med. Ctr. v. Resto, 579, 730 N.W.2d 738, 750 (Mich. Ct. App. 2007)).

The first category of unpaid benefits that Plaintiff seeks to recover is "lost income," defined under the act as "loss of income from work an injured person would have performed . . . if he or she had not been injured." Mich. Comp. Laws § 500.3107(1)(b).

Specifically, Plaintiff claims she is entitled to $45,360 in lost income. Pl.'s Supp. Mem. Ex. 1, ECF No. 14-1. She calculates this figure by estimating that if she had not been injured she would have earned $360 per week per store (i.e., $1,080 per week) for forty-two weeks. Id. She writes: "In answer to interrogatories sworn to under oath by the Plaintiff, lost income has been claimed in the amount of $1,080/week. The basis upon which this loss of income is predicated takes into account the amount of income received per week at three laundromats. This amount was further verified by the tax returns which have been supplied to [Defendant]." Pl.'s Br. 3 (emphasis omitted). She continues: "Any difficulty which [Defendant] may have with regard to calculating [Plaintiff's] lost income may be easily obtained by deducting business expenses from gross income as provided in the tax documents submitted to the Internal Revenue Service. . . . An economist has been retained by the name of Michael Thomson, Ph.D. who will further verify this number should a jury trial become necessary." Id. at 5.

In moving for summary judgment, however, Plaintiff does not offer any evidence substantiating her calculations. She does not attach her tax returns, for example. She does not attach her answers to Defendant's interrogatories. She does not attach an affidavit or other evidence from Dr. Thompson. And she does not attach her own affidavit or any other evidence supporting her lost income calculations. In sum, she offers argument, not evidence, regarding the amount of her lost income.

Defendant, in contrast, opposes the motion with evidence showing that it has not yet paid lost income benefits to Plaintiff because she has not submitted reasonable proof of the amount of the loss. First, Defendant attaches an affidavit from a claims specialist, who testifies: "In regard to Plaintiff's claim for work loss benefits, Plaintiff has not submitted sufficient documentation requested by [Defendant] to verify her claimed [income] loss." Kane Aff. ¶ 8, attached as Def.'s Resp. to Pl.'s Mot. Summ. J. Ex. 2. Defendant elaborates in its brief that "Plaintiff has yet to provide the requested [tax] schedules that will confirm, among other things, business expenses which are not an element of her claim for [income] losses." Def.'s Br. Resp. to Pl.'s Mot. Summ. J. 9 ("Def.'s Br."). Additionally, Defendant attaches a claim adjuster's log, which notes that the documents Plaintiff sent to Defendant are "missing information. . . . [The accountant] needs the profit and loss statements." Def.'s Resp. Ex. 5. Defendant concludes "Plaintiff's [income] loss claim is certainly 'not undisputed' but is subject to verification and review once Plaintif...